On 26 July 2017, Advocate General Wahl delivered his opinion in a case that could have important consequences for online platforms such as Amazon, and for e-commerce in general. According to the Advocate General, a supplier can ban its authorised distributors from using third-party platforms for the online sale of its luxury products.
The case concerns a request for a preliminary ruling that was submitted in the context of a dispute between Coty Germany, a supplier of luxury cosmetics in Germany, and one of its distributors, Parfümerie Akzente. Coty Germany prohibited the members of its selective distribution network from using third-party platforms in a discernible manner when selling its luxury products online.
Advocate General Wahl points out, first of all, that the Court of Justice of the European Union has already held that luxury and prestige products may require the implementation of a selective distribution system in order to preserve the image and quality of these products. He concludes that, when it is necessary to preserve the brand image or prestige image of certain luxury products, a ban on the use of third-party platforms does not contravene the competition rules.
The Advocate General emphasises that Coty Germany only required its authorised distributors not to sell its products via third-party platforms in a discernible manner. Because such platforms are not required to comply with the quality conditions that the supplier imposes on its authorised distributors, it would otherwise lose control over the presentation and image of its products. Moreover, authorised distributors can still sell the products online via their own websites, which, at this stage in the development of e-commerce, is still the preferred online distribution channel. Therefore, according to the Advocate General, the prohibition does not significantly restrict online sales.
It is now up to the Court of Justice, which is not bound by the opinion of the Advocate General, to decide whether a supplier of luxury goods can prohibit its authorised distributors from using third-party platforms for the sale of its products online.